Eli Lilly's (LLY) long-term GLP-1 franchise is unlikely to face significant pressure from generic GLP-1 drugs, as manufacturing constraints should limit generic market penetration while the company's next-generation therapies are expected to preserve its market leadership, UBS Securities said.
The firm said in a Thursday note that generic semaglutide is expected to supply only about 25% to 30% of the global branded GLP-1 market by 2030, citing bottlenecks in fill-finish capacity, device integration and auto-injector pen manufacturing rather than active pharmaceutical ingredient production.
Research into Indian suppliers and the broader device supply chain suggests generic manufacturers will struggle to scale production despite multiple market entrants, leaving a structural supply shortfall, according to the report.
UBS estimates the global GLP-1 market will reach 40 million to 50 million patients by 2030, while generic manufacturers will have the capacity to serve only about 10 million to 15 million patients. The remaining 70% to 75% of the market is likely to remain branded, supporting durable market share for Eli Lilly's portfolio.
The investment firm expects Eli Lilly to outperform consensus earnings estimates over the long term, supported by higher-efficacy therapies such as Zepbound and its next-generation pipeline, including retatrutide and amylin combinations, which the firm believes will help sustain premium pricing and market leadership despite generic competition.
UBS has a buy rating on Eli Lilly with a price target of $1,425.
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